Q1 revenue growth and drags: Corporate earnings rise 4–6%; check details

NEW DELHI: The corporate sector recorded a muted revenue growth of 4-6 per cent in the first quarter of this financial year, slipping from around 7 per cent growth seen in the previous two quarters, Crisil Intelligence has said.The weaker performance was largely due to a slowdown in key sectors such as power, IT services and steel, which together make up a third of the revenue across 600 companies reviewed, according to PTI. According to the agency, while some sectors struggled, others like pharmaceuticals, telecom services, organised retail, aluminium and airlines helped sustain growth during April to June.“The early onset of monsoon and lingering geopolitical uncertainties are expected to have materially impacted some sectors in April-June,” said Pushan Sharma, director at Crisil Intelligence.

What drove Q1 gains and drags across sectors

Power sector revenues are expected to have dropped 8 per cent year-on-year due to cooler weather reducing electricity demand. This also led to a 2-3 per cent fall in coal demand and brought down spot electricity prices, Sharma added.In the IT services sector, project delays linked to global trade tensions left revenue growth flat on a year-on-year basis. The steel sector fared only slightly better, with an estimated 1-3 per cent increase in revenue due to lower prices and plant maintenance shutdowns.The auto industry posted a 4 per cent rise in revenue, backed by stronger retail sales, although high inventory weighed on the gains. Crisil said price hikes and improved export earnings also supported the sector’s numbers.Construction revenue rose 6 per cent, mainly due to the base effect from election-related disruptions last year. The pharmaceutical sector outperformed India Inc’s average, growing 9-11 per cent on the back of solid export demand and stable domestic consumption.Telecom revenues were up 12 per cent due to a rise in subscription charges, while organised retail grew 15-17 per cent, led by fashion and grocery sales. Aluminium saw the strongest growth, with revenue surging 23 per cent, helped by local demand, exports and improved product realisations.Airline revenue also climbed 15 per cent as grounded aircraft returned to service and fleets expanded. Volume growth supported gains in steel, cement and FMCG sectors as well, with each seeing a moderate uptick.